The Romney ‘Fact-Checking’ Scandal

Exclusive: Mitt Romney cites “independent fact-checkers” to spare him from having to explain exactly what he did with Bain Capital after February 1999. But those “fact-checkers” are acting less like impartial journalists and more like argumentative lawyers covering Romney’s political flanks, writes Robert Parry.

By Robert Parry

Self-styled “independent fact-checkers” at the Annenberg Center and the neoconservative-dominated Washington Post have positioned themselves as ardent defenders of Mitt Romney’s claims that his Bain Capital tenure ended in 1999 despite questions raised by contradictory information submitted by Romney himself.

Indeed, the behavior of these “fact-checkers” is rapidly becoming the journalism scandal of Campaign 2012 as the likes of Brooks Jackson at Annenberg’s FactCheck.org and the Post’s Glenn Kessler act more as querulous lawyers protecting Romney than as journalists seeking the actual facts surrounding Romney’s curious business narrative.

Much as the Post’s Ceci Connolly and the New York Times’ Katharine Seeyle engaged in aggressive and dishonest journalism to portray Vice President Al Gore as a serial liar during Campaign 2000, Jackson and Kessler are performing a similar role in portraying President Barack Obama and his campaign officials as liars now. [For the history, see Consortiumnews.com’s “Al Gore v. the Media” or Neck Deep.]

Yet, despite the pro-Romney protectiveness from Jackson and Kessler, the questions raised by the Obama campaign and a number of journalists about Romney’s dubious claims are clearly legitimate. These questions about whether Romney completely divorced himself from his venture capital firm when he rushed off in February 1999 to head the Winter Olympics stem, in large part, from public disclosures that Bain Capital filed with the Securities and Exchange Commission.

Yet, in his presidential campaign disclosure form in 2011, Romney declared that he “has not been involved in the operations of any Bain Capital entity in any way” after leaving Boston for Salt Lake City, Utah, and the Olympics job on Feb. 11, 1999. Jackson and Kessler treat Romney’s bald assertion as fact despite the conflicting evidence.

There are also logical questions that any journalist worth his or her salt would ask: “Mr. Romney, does your claim mean you had no contact with your former Bain associates by telephone, e-mail or in person in that time frame? Did you really build a Chinese Wall between yourself and your company?”

Common sense would tell you that Romney did have conversations with his long-time subordinates. There was no legal reason not to, and he was involved enough to sign some of the SEC forms listing him as the person in charge. (Only later, after it became clear that Bain-related plant closings and job outsourcing after February 1999 were a political liability, did Romney start insisting that his separation had been total.)

If Romney now confirms that he had some contacts with Bain executives, the next questions would be when, what, why and with whom. Are there e-mail messages or memos that could be examined? So, instead of offering those kinds of details, he cites the work of these “independent fact-checkers” to shield him from the inquiries.

TV Excuses

It was a startling aspect of Romney’s brief round-robin interviews with five TV networks on Friday that he was allowed to skate away with squirrelly responses to these questions.

For instance, in the NBC interview, correspondent Peter Alexander asked, “after February 1999 you never attended a single meeting for Bain, a business meeting, even by phone, attending a meeting regarding Bain or Bain-controlled entities?”

Calm and collected with a patronizing smile on his face, Romney responded: “You’ve got quite a few questions there, so let’s go through them. I didn’t involve myself in any way with Bain Capital’s enterprise after February 1999.”

Alexander followed up: “Not participating in a single meeting either in person or by phone?”

Romney answered: “I can’t recall a single meeting or a single participation in an investment decision by Bain or personnel decision.”

Even if Romney’s answer could be technically true and it contradicts what Romney told the Boston Herald when he headed off to Utah with his stated intent to “stay on as a part-timer with Bain, providing input on investment and key personnel decisions” there are many other business-related topics not covered by Romney’s narrow denial.

Romney also is hair-splitting when he references Bain “entities” in his federal campaign disclosure. While the average reader might think Bain’s investments would fall under this “entities” rubric, Romney apparently is excluding his board membership on behalf of Bain at companies in which Bain held major interests, such as Staples and Lifelike.

On that point, Annenberg’s FactCheck.org bends over backwards into a protective crouch for Romney, saying, “We think the term ‘Bain Capital entity’ on Romney’s disclosure forms could only refer to Bain’s various investment funds, not to companies in which it invested.” Gee, how understanding of you!

Missing Hours

These “independent fact-checkers” also show little curiosity about discrepancies over how much time Romney was allegedly working during this time period.

FactCheck.org accepted self-serving accounts about Romney working 16-hour days, seven days a week, after he arrived in Salt Lake City. But Kessler instead cites Romney’s statement to a Massachusetts election board that as head of the Winter Olympics he “worked, on average, over 12 hours per day, 6 days per week.” One might wonder where the missing 40 or so hours went.

But the two “fact-checking” teams appear more interested in shutting off lines of inquiry about Romney’s work at Bain Capital than in getting to the bottom of the many mysteries. Kessler even takes the position that it’s no big deal to file false SEC forms.

“There is a journalistic convention that appears to place great weight on ‘SEC documents,’” Kessler wrote. “But these are public filings by companies, which usually means there are not great secrets hidden in them. The Fact Checker [i.e. Kessler], in an earlier life covering Wall Street, spent many hours looking for jewels in SEC filings.”

Though it’s hard to judge how inept Kessler was in examining SEC documents, I spent four years editing securities-regulation coverage for Bloomberg News and some of our reporters were quite adept at mining the filings for nuggets. It’s also an area where companies must tell the truth, with minimum spin, or face serious consequences.

Many corporate executives, at places like Enron and WorldCom, went to jail, in part, for filing false or misleading disclosure documents. It is indeed a potential felony to knowingly sign and submit SEC records with materially false information, such as telling potential investors that a person is in charge when the person is not in charge.

One of the “great secrets” hidden in SEC filings should not be that the guy listed as CEO isn’t really the CEO.

Whether a criminal case can be built upon Bain Capital’s admittedly false filings may be open to question given statutes of limitations and other issues but it’s hard to understand how “fact-checkers” would take such a forgiving view of a politician signing false and misleading documents.

What does it say about Mitt Romney that he would repeatedly sign legal documents that contained information that he knew to be untrue and why would “fact-checkers” defend him for doing so.

But FactCheck.org’s Jackson and the Post’s Kessler treat these transgressions with a “boys will be boys” casualness, almost as if one is supposed to rally to the defense of well-bred white men who run powerful private-equity firms and have lots of money.

Kessler wrote that he “concluded that much of the language saying Romney was ‘sole stockholder, chairman of the board, chief executive officer, and president’ was boilerplate that did not reveal whether he was actually managing Bain at the time.” Yet, whether “boilerplate” or not, the filings were false and/or misleading.

Kessler even adds that “there is no standard definition of a ‘chief executive,’ securities law experts say, and there is no requirement for anyone to have any responsibilities even if they have that title.” Oh, really? Here’s how Investopedia (a reference source that Kessler has cited in the past) defines a “chief executive officer”:

“The highest ranking executive in a company whose main responsibilities include developing and implementing high-level strategies, making major corporate decisions, managing the overall operations and resources of a company, and acting as the main point of communication between the board of directors and the corporate operations. The CEO will often have a position on the board, and in some cases is even the chair.”

To claim repeatedly over a period of more than two years that someone was the CEO and thus the “controlling” person if that were not true represents what many securities regulators would call a “material” deception.

Though Bain did file some documents without reference to Romney, as Kessler notes, that does not and should not absolve the firm or Romney from responsibility for filing others with what they now say is false information.

A Different Tone

While devising endless excuses for Romney and his Harvard Business School buddies, these same “independent fact-checkers” heap scorn on the African-American president and his campaign for daring to raise these impertinent questions about the much-admired Romney.

Annenberg’s FactCheck.org mocked a six-page letter from Obama’s campaign with the flippant response, “your complaint is all wet.” In giving Obama “three Pinocchios” for pointing out the discrepancies in Romney’s Bain story, Kessler said he spared Obama a fourth Pinocchio (a total “whopper”) with the grudging admission that “there is grey area” regarding Romney’s last few years at Bain Capital.

In a larger sense, however, this issue of exactly when Romney left Bain is a ruse, a diversionary line of defense that Romney has been building since he ran for Massachusetts governor in 2002. The reason for this ever-expanding moat is that it lets Romney deny responsibility for Bain-related plant closings and off-shoring of jobs that occurred from 1999 to 2002.

But the key question is not when Romney left but who set in motion the strategies that led to the plant closings and the job off-shoring. It was Romney who pulled the trigger on investments in companies whose business model involved facilitating these actions for other companies.

For instance, as Washington Post investigative reporter Tom Hamburger explained in a front-page story on June 21, Romney’s venture capital firm “owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components.”

In other words, Bain Capital wasn’t just investing in companies that shipped jobs overseas themselves, Bain owned companies that were trailblazing the practice of outsourcing American jobs to low-wage companies like China and India. The story said:

“A Washington Post examination of securities filings shows the extent of Bain’s investment in firms that specialized in helping other companies move or expand operations overseas.

“Bain played several roles in helping these outsourcing companies, such as investing venture capital so they could grow and providing management and strategic business advice as they navigated this rapidly developing field.”

A Lucrative Foray

As Hamburger reported, “Bain’s foray into outsourcing began in 1993 when the private equity firm took a stake in Corporate Software Inc., or CSI, after helping to finance a $93 million buyout of the firm. CSI, which catered to technology companies like Microsoft, provided a range of services including outsourcing of customer support. Initially, CSI employed U.S. workers to provide these services but by the mid-1990s was setting up call centers outside the country.

“Two years after Bain invested in the firm, CSI merged with another enterprise to form a new company called Stream International Inc. Stream immediately became active in the growing field of overseas calls centers. Bain was initially a minority shareholder in Stream and was active in running the company, providing ‘general executive and management services,’ according to SEC filings.

“The corporate merger that created Stream also gave birth to another, related business known as Modus Media Inc., which specialized in helping companies outsource their manufacturing. Modus Media grew rapidly. In December 1997, it announced it had contracted with Microsoft to produce software and training products at a center in Australia. Modus Media said it was already serving Microsoft from Asian locations in Singapore, South Korea, Japan and Taiwan and in Europe and the United States.”

All those events occurred while Romney acknowledges that he was the hands-on CEO at Bain Capital. Hamburger also describes continuation and expansion of these outsourcing activities after February 1999. But those activities were simply an extension of what Romney had started.

To pretend that there was some bright line between the “good” Bain Capital before February 1999 and the “bad” Bain Capital afterwards is downright silly. It is even sillier for “independent fact-checkers” to suggest that Romney had no responsibility for what his own company did.

If these supposed “fact-checkers” really cared about facts, perhaps they would use their new status as Romney’s favorite defenders to ask the Republican presidential candidate to release Bain Capital’s internal records that would show whether he did or did not have any contacts with his subordinates after February 1999.

The “fact-checkers” might also press him to release his tax returns. So far, all they have done is throw brickbats at others who have tried to raise questions regarding the vetting of a man who wants to be President of the United States but doesn’t want to tell the American people much about how he earned his money or even where it is.

To read more of Robert Parry’s writings, you can now order his last two books, Secrecy & Privilege and Neck Deep, at the discount price of only $16 for both. For details on the special offer, click here.]

Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at neckdeepbook.com. His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & ‘Project Truth’ are also available there.

Post navigation

36 comments for “The Romney ‘Fact-Checking’ Scandal”

GEORGE WOELFEL

July 16, 2012 at 17:19

ROMNEY DOESN’T WANT HIS LDS BRETHREN TO KNOW THAT HE’S BEEN HOLDING OUT ON HIS MORMON TITHE PLEDGE IF HIS TAXES ARE MADE PUBLIC. IF YOUR CHURCH CAN’T TRUST YOU, HOW DO YOU EXPECT ALL AMERICANS TO TRUST YOU ROMNEY.

Galactic Cannibal

July 16, 2012 at 15:10

Why is it so hard for Americans to tell the truth.
Mr Romney do you really think that Americans believe, you never ever had any contact with your buddies in Bain Capital in 2001, even thought your are listed as â€œthe sole shareholder, sole director, Chief Executive Officer and President of Bain Capital .

Come on Dude tell the truth. We are not all that stupid.

“You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time. Abraham Lincoln “

unbound

July 16, 2012 at 07:12

Let’s be honest, the Annenberg Center (aka FactCheck) has always been more focused about keeping the “facts” balanced so that both sides look equally bad. They have never been particularly good about getting to the truth of anything. They are generally not partisan, but they are generally not looking to get to the hard facts either.

Talleyrand

July 16, 2012 at 02:41

I am sure that Romney is always skirting the truth by creating a sort of “middle story.” Every man sends out signals when he lies. GWB used to look sideways, snicker and shake his shoulders a bit, like a kid caught with his hand in the cookie jar. Obama’s nerves get betrayed when he starts stuttering a bit and using “folks” in every second sentence. Romney starts spouting absurdities and gets “rigid”… He starts talking about deconstructing the facts, or, alternatively, the heighth of the trees…

Reagan believed his own lies, so he was very serene. And Bush senior? You just had to read his lips. Like all GOP pols, he was helping himself and his rich friends.

A last note on Romney…. I have interviewed many CEOs. I have rarely seen such a pack of BS artists in my life, and he is no different. And the bigger the business, the more the BS.

Emilio

July 16, 2012 at 00:36

All right wingers are touched by madness. They are soulless devourers of the substances of life, and would be pushed to provide a cogent and consistent reason for their miserable self-serving existence. This is where Mitt Romney can be found: inside his little world of moneymaking and self-aggrandizement at the expense of everyone not participating in his tiny drama. If asked what he would like his legacy to be, the response would naturally be divorced from the reality of his insane greed and selfishness. A man like Mitt Romney would make an excellent subject for an episode of The Twilight Zone; as a man who has delivered his soul to the Devil in return for all the money and possessions he can amass during his brief stay on Earth.

Me

July 16, 2012 at 03:43

I am a right-winger, albeit foreign, so what I can tell you is that the GOP speeches, drivels, ‘leaders’, ideologues, warmongers, neocons, Palin, the reactionary and racist far-right, tea partiers, christian fundamentalists, Faux News #1 on racism commenters, etc, and Romney running for president while having hidden stashes in the Bermuda, daily flip-flops, spineless on supporting healthcare and making ridiculous statements regarding his accountability in Bain deeds, are well all part of a ludicrous disgrace by my right-winger standards.

MaryinChicago

July 15, 2012 at 18:38

Great analysis of BOTH the SEC filings issue and the what-did-Bain-do-before-1999 issue, Bob!

To me, the “material” deception you point out actually constitutes TWO issues: (1) showing Mitt as the boss at Bain Capital, Inc. and/or its investment funds at a time when he allegedly had “no involvement” with the firm is a material misrepresentation, and (2) failing to disclose who actually WAS running BCI and/or its investment funds at that time is a material omission.

Glenn Kessler may believe all this doesn’t matter, but the fact is that outsiders — potential investors, clients, lenders, creditors, employees — RELY on SEC documents in deciding whether to do business with a company. So Bain — and Romney himself — are exposed, not JUST to potential civil fines from the SEC for filing documents they knew to be false, but also to potential lawsuits from people who relied on those false documents.

Keep digging, Consortium!

Art

July 15, 2012 at 15:13

I have noticed on more than one occasion where FactCheck.org was bias toward Mitt Romney. But I thought at those times it was just my bias opion but not now. If a Conservative paper pays your check you will lean their way.

Jim Pflaum

July 15, 2012 at 13:33

Youâ€™re spot-on once again Bob. Indeed, the real issue isnâ€™t when Romney supposedly left Bain Capital, but rather what he did while he was Bainâ€™s CEO. The fact is that Romney amassed his fortune by devising business strategies at Bain that ultimately led to untold numbers of Americans losing their jobs.

Gindy53

July 15, 2012 at 12:54

Gillespie, a Romney campaign mouthpiece, said that Romney “retroactively retired” from Bain. Now that says to me that he WAS running Bain in 2002 but that’s about as far as the logic can go. How can someone retroactively retire when they received a salary, signed documents, and went to meetings for said company? That’s sort of like a retroactive abortion, impossible.

Eliza

July 15, 2012 at 12:16

Thank you, Mr. Parry. Having been signatory to man federal government documents in my life (from time sheets to peer reviews of draft documents), and despite how relatively “unimportant” those documents have been, I am VERY aware of the federal government’s attitude towards submitting “false documentation.” It was not a waste water plant’s manager’s illegal disposal of wastes (at a federal facility) that got him thrown in jail for two years — what sent him to a cell was his signature on a document declaring the appropriate disposal of that waste.

I am sorry to learn now that the Department of Justice is not (quickly, since a lot depends on it) investigating the alleged (by Mr. Romney himself)false SEC filings. Sure makes me wonder whether the chain-of-custody documentation of hazardous and radioactive materials is “sacred” anymore, either. Romney is saying one thing, and the documents he signed say something else. THAT is the issue, so far as I’m concerned — and a much more serious one than whether he participated in “offshoring.” We already know he believes in offshoring, don’t we? After all, he is an efficiency expert first, human later (if at all).

Roger Thomas

July 15, 2012 at 03:41

So, a company which provided ‘management and strategic business advice’ did not know that its CEO, sole shareholder, was not its CEO? Pull the other one! Romney is caught out in a massive lie, having enriched himself by selling out American jobs. Running a country’s economy needs something more than a facility for asset-stripping vulnerable companies. As far as I have noted from his very limited proposals, his economic policies are nothing more than a rerun of Bush’s disastrous years. God help America if this self-seeker should get to be President.

Eliza

July 15, 2012 at 12:03

The man himself is a rerun. Given his LONG family background in the LDS church, whose major function is to create obedient people, it is not safe to assume that Mitt Romney has ever had an original thought.

Dr. Rick Dominique

July 15, 2012 at 03:10

In a June 17, 2002, appearance before the Massachusetts State Law Ballot Commission, Romney said that during his Utah-based Olympics service, there were â€œwere a number of social trips and business trips that brought me back to Massachusetts, board meetings, Thanksgiving and so forth.â€~Politico

Did Romney lie to the commision? Did all these “business” trips and “board” meetings not involve Bain Capital, of which he was still listed as CEO and sole owner? It stretches credulity even for a non-sophiscate in private equity and investment business as myself.
If Romney was forthright, it may be less of a story than the disdain he shows for common sense and his detractors by fabricating a highly implausible scenario which illuminates his lack of moral fiber and reinforces his mendacity.
Robert Parry asks the right questions and follow ups that any “investigative journalist” or “fact checker” should have before opining and rendering judgement.

Bill

July 15, 2012 at 02:58

Every election cycle Democrats discover a secret Standard Practice That Everyone Knows About!! that they fail to meet. In this case: they didn’t know that when a company pumps out dozens of public, legally binding documents they were supposed to extensively interview people in that company to make sure if the really MEANT what they put in those public, legally binding documents.

Still. Barack Hussain is absolutely right. We mustn’t be rude!

Larry Legassey

July 15, 2012 at 13:36

What is the Barack Hussain supposed to mean? He is President of the U.S.A. Barack Obama. Elected by quite a majority of popular and electoral college votes. Something that George W. Bush could never claim. Are you to much of a moron to realize this fact? And by the way I believe it is Hussein.

bobzz

July 14, 2012 at 23:40

Per Perry’s article: “Calm and collected with a patronizing smile on his face, Romney responded: â€œYouâ€™ve got quite a few questions there, so letâ€™s go through them. I didnâ€™t involve myself in any way with Bain Capitalâ€™s enterprise after February 1999.â€
Alexander followed up: â€œNot participating in a single meeting either in person or by phone?â€
Romney answered: â€œI canâ€™t recall a single meeting or a single participation in an investment decision by Bain or personnel decision.â€

Question: I understand Romney’s first answer (I didn’t involve myselfâ€¦), but does the second answer strike anyone else as strange (I can’t “recall” a single meetingâ€¦). Why not just make a flat denial? “No, I did not.” It sounds like the bullying defense. “I don’t recall.” It sounds like the Reagan defense, “I don’t remember.”

theemailman

July 14, 2012 at 23:11

I Would bet ALL my money if, Rummey was NOT reading the answers to so-called question from a TV.

It is impossible to believe that Bain Capital followed a course of action that Romney would have disapproved of once he assumed the post of head of the U.S. Olympic Winter Games. He was still “the guy” regardless of where he was.

Dr. Don

July 14, 2012 at 19:34

This Bain SEC controversy is proof of the fact that America desperately needs honest, independent, hard-working (and well-financed) journalists. Like on this site! (A plug for you guys to pass a few $ on to Consortium News. I have.)

The clips I saw last night from Romney’s “interviews” showed him saying that the president needed to take control of his campaign and apologize for the lies the fact checkers had identified. I was surprised that no one asked him if he was willing to do the same for the lies the same fact checkers had identified as coming from his campaign.

NotHavingFun

July 14, 2012 at 18:31

And “tomorrow’s old news” really is not “old” as long as the campaigners continue to run for office. Right now, US citizens’ memmories seem quite short much like a text message…

NotHavingFun

July 14, 2012 at 18:28

Disspiriting? How many false statements, coverups, distortions, and dollars does it take to disspirit America?

thomachuck

July 14, 2012 at 17:31

It is ironic that in 2008 we were hearing from the right about “the president-elect that we don’t know anything about.” Now the shoe would appear to be on the other foot. By the way, I am less sure than you are that the Washington Post is neo-conservative dominated. To say so is to denigrate the great work of E.J. Dionne, Gene Robinson, and many other excellent arguers of the progressive POV. I am a bit sad to see fact checkers getting egg on their faces over this issue, since I think they mostly provide good debunking of rumors circulated by the humongous GOP misrepresentation machine. To see them doing less than yeoman’s service in regard to this Willard issue is dispiriting. I would like to say that this Bain relationship is just going to be tomorrow’s old news but never say die.

Both the Washington Post and the New York Times have both kind of journalists, liberal and conservative and the reason is simple: both papers want to reach an audience as vast as possible. If the Times had only Paul Krugman, Gail Collins and Charles Blow the number of daily copies sold would be much lower.

Barbara

July 15, 2012 at 17:25

so?

william Bradley

July 16, 2012 at 01:38

Politifact’s “half-true” rating is probably more accurate. However, even if (as factcheck.org)research on the felonious nature of seemingly falsifying SEC reports is true, (that it is not a felony. It certainlly is potentially a civil liability. If I, as an investor have an interest in who is the CEO of the company in making my investment decisions,then leaving the old well-known CEO on the placard certainly holds some PR and material consequences for investments. If they were misleading about this, I’m sure that was the reason. A lie is a lie in that case. Felonious or not. It misrepresented the facts in ways that could have materially affected investors.

Kenny Fowler

July 14, 2012 at 17:15

“If these supposed â€œfact-checkersâ€ really cared about facts, perhaps they would use their new status as Romneyâ€™s favorite defenders to ask the Republican presidential candidate to release Bain Capitalâ€™s internal records that would show whether he did or did not have any contacts with his subordinates after February 1999.”

It’s going to be big fun when somebody digs up those records. Ahh, the beauty of the digital age.

It would be a lot less expensive and damaging to the Governors campaign, to simply hire an independent auditing firm to examine and give an overall summary of the issue, than it would be for the upcoming multi million dollar ad campaigns of him redundantly saying ‘I am telling you it didn’t happen’.